Bulls Fall Short in Attempt to Keep Winning Streak Alive…..

After a late-day rally that looked like it could erase weekly losses for stocks, the bulls fell short in their attempt to keep the winning streak alive but ended the final session in the green. Upbeat global April business activity reports, led by the U.S., and a solid rebound in home sales preserved optimism of strong 2021 economic output to pare losses that came amid concerns about the implications of rising COVID-19 cases in key pockets of the world, and reports that the White House may be mulling a sizeable hike in capital gains taxes that had roiled the markets. Meanwhile, earnings season continued to roll on and figures remained mostly positive. However, Dow members Intel Corporation and American Express saw pressure as the Street scrutinized their results and guidance, while Mattel rose modestly after posting a smaller-than-expected loss. Treasuries were lower, lifting yields, and the U.S. dollar came under pressure, while gold fell, and crude oil prices were modestly higher. Overseas, Europe finished in the red, but the upbeat economic data helped to pare some of the losses, while markets in Asia were mixed after a choppy week.

The Dow Jones Industrial Average rose 228 points (0.7%) to 34,043, the S&P 500 Index increased 45 points (1.1%) to 4,180, and the Nasdaq Composite jumped 198 points (1.4%) at 14,017. In heavy volume, 778 million shares were traded on the NYSE and 4.3 billion shares changed hands on the Nasdaq. WTI crude oil gained $0.71 to $62.14 per barrel. Elsewhere, the Bloomberg gold spot price was $7.73 lower at $1,776.21 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—fell 0.6% to 90.82. Markets were lower for the week, as the DJIA moved 0.5% to the downside, the S&P 500 ticked 0.1% lower, and the Nasdaq Composite declined 0.3%.

Manufacturing and services sector growth remains solid, new home sales jump…..

The preliminary Markit U.S. Manufacturing PMI Index for April ticked higher to 60.6 from March’s unrevised 59.1 figure, moving modestly further into expansion territory denoted by a reading above 50. The Bloomberg consensus estimate called for the index to rise to 61.0. The preliminary Markit U.S. Services PMI Index showed growth (above 50) for the key U.S. sector accelerated more than expected, rising to 63.1 in April from March’s 60.4 figure, and compared to forecasts of an increase to 61.5.

Markit noted that U.S. private sector businesses registered a survey record expansion of output during April, as looser COVID-19 restrictions and strong client demand boosted business activity. A steep upturn in manufacturing production occurred despite unprecedented supply chain disruptions, while services activity growth hit a new high. New order growth accelerated with firms noting the strongest upturn on record, backlogs of work rose at the fastest pace since September 2014 amid the surge in demand, and new export orders rose at the fastest pace since composite data series began in 2014. However, the report said that although the rate of inflation eased slightly the rise was the second-fastest on record, with many firms seeking to pass on greater costs to clients.

New home sales jumped 20.7% month-over-month (m/m) in March to an annual rate of 1,021,000 units, versus forecasts calling for a rate of 885,000 units and compared to February’s upwardly revised 846,000-unit level. The median home price ticked 0.8% higher y/y to $330,800. New home inventory fell to a 3.6-months supply at the current sales pace from the 4.4-months level in February. Sales in all regions rose sharply m/m, except for in the West where sales dropped. Sales in the Northeast, Midwest and South were up sharply y/y, while down in the West. New home sales are based on contract signings, offering a timelier read on housing activity compared to the larger contributor of existing home sales, which are based on closings.

Treasuries were lower, as the yield on the 2-year note ticked 1 basis point higher to 0.16%, while the yields on the 10-year note and the 30-year bond rose 3 bps to 1.57% and 2.25%, respectively.

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